Financial Daily from THE HINDU group of publications
Thursday, Jun 10, 2004
Financial Daily from THE HINDU group of publications Thursday, Jun 10, 2004 |
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Money & Banking
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Pension Plans RBI plans cess to help States pay pensions C.R. Sukumar
Hyderabad , June 9 THE Reserve Bank of India (RBI) is contemplating a dedicated pension fund, which would be floated through a levy on existing employees. The apex bank is of the view that the proposed State Pension Fund would partially meet the pension burden of the existing employees and pensioners. According to sources, the central bank is planning to levy a cess and also set aside a portion of the increased salary and dearness allowance towards creating the Pension Fund. An RBI Working Group constituted to study the pension liabilities of the State Governments has also recommended reduction in the leave encashment period in a phased manner, the sources said. The Working Group has also suggested that savings be kept outside the States' consolidated fund and the public account. According to the sources, the apex bank in its latest report on the State finances has expressed concern over the deteriorating State finance especially on account of rising interest payments and bloated guarantees, some of which were not completely reflected in the States' Budgets. Currently, pension liabilities of States account for around 10 per cent of the revenue receipts compared to less than three per cent in the 80s.
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